The building of new homes has fallen to the lowest level in nearly two years, according to the Commerce Department on Wednesday.
Housing starts fell 2.5% for July to 1.8 million on a seasonally adjusted annual basis. This marks the fifth decline in housing starts in the last six months. It is also the lowest level seen in construction of new homes since November 2004.
Economists had expected a decline, just not as large as today's report indicated.
Building permits fell drastically in July, by 6.5% to 1.75 million units. This is the largest drop seen since September of 1999. Building permits are an indication of future construction activity. Permits are at the lowest level since August 2002.
The Commerce Department also revised June's housing starts downwards, to an annualized rate of 1.84 million, down from 1.85 million.
When compared to one year ago, housing starts are down 13.3% for July.
The confidence of US home builders has continued to fall, according to the National Association of Home Builders. At 32, confidence is at the lowest level since 1991.
Economists agree that the housing market is changing. The debate continues as to the size of the decline and the potential impact to the economy.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com , a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!